Archives for March 13, 2019

Ripple price rallied recently and broke many key resistances near $0.3080 against the US dollar.The price even settled above the $0.3100 resistance and the 100 hourly simple moving average.Yesterday’s highlighted key bearish trend line was breached with resistance at $0.3085 on the hourly chart of the XRP/USD pair (data source from Kraken).The pair rallied towards the $0.3250 resistance level and later corrected lower sharply.Ripple price moved nicely into a bullish zone against the US Dollar and bitcoin. XRP/USD is trading above the $0.3100 support and it could resume its upward move in the near term.Ripple Price AnalysisRecently, we saw a steady decline in ripple price from the $0.3150 swing high against the US Dollar. The XRP/USD pair traded below the $0.3100 and $0.3080 support levels. However, the $0.3040 support area acted as a strong support. The price started a solid upward move and broke the $0.3060 and $0.3080 resistance levels to move into a positive zone. There was a break above the 61.8% Fib retracement level of the last decline from the $0.3135 high to $0.3045 low.More importantly, yesterday’s highlighted key bearish trend line was breached with resistance at $0.3085 on the hourly chart of the XRP/USD pair. It opened the doors for more gains and the price rallied above the $0.3100 resistance and the 100 hourly simple moving average. The upward move was strong as the price climbed above the $0.3150 and $0.3200 resistance levels. It traded towards the $0.3250 resistance level and later corrected lower sharply. It declined below the $0.3200 level and the 50% Fib retracement level of the recent rally from the $0.3060 low to $0.3245 high.However, the previous key resistance near the $0.3100 level is acting as a strong support. Besides, the 76.4% Fib retracement level of the recent rally from the $0.3060 low to $0.3245 high is also near $0.3100. Furthermore, the 100 hourly SMA is also near the $0.3100 level. Therefore, as long as the price is above $0.3100, it could bounce back in the near term.Looking at the chart, ripple price clearly jumped into a positive zone above $0.3100. Having said that, it was rejected above the $0.3200 level. In the short term, there could be a few bearish moves, but the price is likely to climb above $0.3150 and $0.3180. A close above $0.3200 is needed for an upside acceleration.Technical IndicatorsHourly MACD – The MACD for XRP/USD is likely to move back into the bullish zone.Hourly RSI (Relative Strength Index) – The RSI for XRP/USD corrected lower recently, but it is still above the 50 level.Major Support Levels – $0.3100, $0.3080 and $0.3065.Major Resistance Levels – $0.3150, $0.3180 and $0.3200.

Long-time Grin coder “Ignotus Peverell” will receive financial support to work on the cryptocurrency, a move that makes him the nascent project’s third paid team member.

In a weekly developer meeting Monday, developers voted to fund Peverell for his work on Grin with roughly $10,000 per month. With 4,919,040 GRIN tokens in circulation, according to CoinMarketCap, the estimated market capitalization of the cryptocurrency is well over $13 million.

Grin, being a relatively new blockchain, went live in mid-January in a bid to implement the privacy-enhancing protocol “MimbleWimble,” designed to obfuscate transaction details such as amount and account addresses. Named after a tongue-tying curse in J.K. Rowling’s best-selling Harry Potter books, the name Ignotus Peverell itself is a pseudonym that references a character within the series.

In the context of the Grin community, Peverell was one of the original creators of the Grin project who back in 2016 started the first implementation of the mimblewimble protocol on GitHub.

A user by the name of “Antioch Peverell” – another Harry Potter character reference – was similarly voted up by the community in late February. Before this, user “Yeastplume” was the sole full-time funded Grin developer.

Yeastplume told CoinDesk:

“There’s no [official] roles. We just continue to work on what we see fit, which so far seems to be working okay.”

Emphasizing in a public Gitter channel that being funded for Grin development work was “risky employment,” Yeastplume later characterized the financial support as more akin to donations.

Audit ahead

Having decided to conduct a third-party review of Grin’s “cryptographic and consensus-critical code,” community members unanimously voted to employ Coinspect over other auditors such as Quarkslab and NCC last month.

Now, having paid a fee up-front to the company of roughly $17,000, Grin community members expect a draft report by April 20. “It’s going to come quickly. They’ve also already produced one excellent vulnerability report,” stated Ignotus Peverell.

As stated on a Github, the estimated cost of the audit is roughly $80,000.

Funds are sourced from the “Grin General Fund,” which back in December of last year raised 17.28 BTC, with an estimated worth at press time of $66,500 specifically for the purposes of this security audit.

ETH price is struggling to trade above the $133 and $134 resistance levels against the US Dollar.The price is holding the $130 support, it is likely to make the next move soon.This week’s crucial bearish trend line is intact with current resistance at $132 on the hourly chart of ETH/USD (data feed via Kraken).The pair could either break the trend line and rally or decline below the $130 support in the near term.Ethereum price is following a bearish structure against the US Dollar and bitcoin. However, if ETH breaks $132 and $134, there could be a decent bullish wave towards the $138 level.Ethereum Price AnalysisAfter struggling to break the $134 resistance, ETH price declined steadily against the US Dollar. The ETH/USD pair traded below the $132 support and settled well below the 100 hourly simple moving average. It even broke the 50% Fib retracement level of the last swing wave from the $127 low to $134 high. The price traded close to the $130 support level, where buyers emerged. There was a minor upside correction above the $131 level and the 23.6% Fib retracement level of the recent decline from the $134 high to $130 low.However, the upside move remains capped by the $132 level and the 100 hourly simple moving average. More importantly, this week’s crucial bearish trend line is intact with current resistance at $132 on the hourly chart of ETH/USD. The trend line is close to the 50% Fib retracement level of the recent decline from the $134 high to $130 low. Clearly, the $132-133 resistance area is very crucial and it could be spark the next move.The next move in ETH could be either above the $132 and $133 resistance levels or below the $130 support. If there is an upside break above $133 and the 100 hourly SMA, the price could climb sharply higher. The next key resistances area near the $135 and $136 levels, followed by $138. On the other hand, a break below the $130 support may push the price towards the $127 support level.Looking at the chart, ETH price seems to be facing a strong resistance near the $132 level and the 100 hourly SMA. Besides, the $133 and $134 levels are also significant barriers. Therefore, buyers need to put up a strong fight if they have to push the price back in a positive zone.ETH Technical IndicatorsHourly MACD – The MACD for ETH/USD is slowly moving back in the bullish zone.Hourly RSI – The RSI for ETH/USD managed to move above the 50 level, with a positive bias and angle.Major Support Level – $130Major Resistance Level – $133

Best-known internationally as the chief executive of the blockchain smartphone startup Sirin Labs, Moshe Hogeg is becoming known for something else in Israel – mounting lawsuits.

As reported extensively by regional news outlets, a lawsuit filed in January claims Hogeg misappropriated funds from the sale of new cryptocurrencies for both his own gain and to benefit his investment portfolio, including Sirin Labs. The judge has reportedly given Hogeg until March 15 to settle with the plaintiff, Chinese investor Zhewen Hu.

This follows an earlier case involving Hogeg’s company Invest.com that has since been settled.

Specifically, in the case of the ICO for the startup Stox, a company co-founded by Hogeg and endorsed by boxer Floyd Mayweather (resulting in a fine from the SEC), the lawsuit claims Hogeg inappropriately withdrew proceeds from its $35 million ICO and used the funds for other projects, including Sirin Labs, his VC firm Singulariteam and the blockchain startup Orbs.

The Stox lawsuit, which focuses on several sections of the startup’s white paper, alleges Hogeg encouraged people to invest in the Stox ICO by touting a partnership with his own firm, Invest.com, having effectively “made a contract with himself” to inflate interest in the offering. It also says Hogeg presented himself on Telegram as a mere investor rather than a leader of the project, giving the illusion of more participants.

As for the lawsuit related to Stox, Hogeg told CoinDesk: “The whole matter is completely made up” and “will be quickly resolved in court.”

The Stox lawsuit also mentions allegedly mismanaged funds going to Sirin Labs, the startup of which Hogeg is currently CEO. Sirin raised more than $157 million in a 2017 token sale and is now seeking distribution partners for its Finney smartphone. Hogeg said he is himself one of the leading investors in Sirin Labs. After leaving Stox in 2017, he took the reins of the company from Kazakhstani investor and Sirin Labs founder Kenges Rakishev.

The lawsuit claims some of the funds Hogeg allegedly mismanaged during the Stox ICO, before he joined Sirin Labs, were distributed in some fashion to the blockchain company Orbs.

Beyond the Stox ICO, Hogeg was listed that same year as an advisor to the LeadCoin ICO, launched by a startup called Webydo that Hogeg also invested in through Singulariteam. Singulariteam’s second managing partner is Rakishev.

Tangled web

In light of the questions that have been raised about Stox and Sirin Labs, CoinDesk partnered with the blockchain analytics firm Alethio, part of the Brooklyn conglomerate ConsenSys, to use its new reporting tools to explore the ICOs in which Hogeg has been involved.

Alethio prepared a three-pronged report detailing its analysis, which covered the Stox ICO, the Sirin Labs ICO and the LeadCoin ICO.

The report concludes that all three ICOs have a single top holder in common, a wallet that as of February 2019 still held roughly 3 percent of the supply of all three tokens, respectively. This wallet, 0x8c373ed467f3eabefd8633b52f4e1b2df00c9fe8, also engaged in a unique pattern of transfers during the LeadCoin ICO, which will be explored below.

Although the blockchain analysis by Alethio doesn’t show who controlled any wallets, and Hogeg’s spokesperson declined to clarify if they are aware of the owners, the blockchain analysis did show that the wallet with all three tokens received LeadCoin tokens indirectly, through a repeating pattern of proxy transfers, from the LeadCoin sale itself.

Separately, Alethio also found that during Sirin Labs’ SRN token sale, one wallet received 4,564 ETH from the SRN sale’s official wallet. This second wallet (0x59b681402bcb2c8460a506a88d75be1cf1326528), later sent back the same amount of ETH to the SRN sale’s account, potentially creating the appearance of more activity.

Alethio data scientist Danning Sui explained that her team “found a circle of ETH transfers” related to the SRN ICO. Lastly, this second wallet eventually received 50 percent of all SRN tokens, according to Alethio’s analysis. Many of the SRN tokens from this wallet appeared to end up on exchanges shortly after the sale.

Both of these examined wallets have transaction histories that are publicly recorded on the ethereum blockchain.

Hogeg’s spokesperson said they could not share information about the wallet that recycled ETH funds in the Sirin Labs ICO and eventually received half of the token supply, except to say: “This wallet participated in Sirin Labs’ presale.”

ETH funds from the token sale were sent to wallet 0x59b681 and then sent ETH back into the sale’s account. (Image courtesy of Alethio)

What the blockchain says

Sui explained that the blockchain data does not suggest any connection between the parties that operated these wallets involved with withdrawals from the LeadCoin sale and Sirin Labs sale, respectively.

Nor does the data suggest there is a pattern that connects these three sales other than common investors, such as the wallet 0x8c373ed467f3eabefd8633b52f4e1b2df00c9fe8, which is a top holder of tokens from Sirin Labs, LeadCoin and Stox.

Regardless of who operated that top holder wallet during the LeadCoin token sale, Alethio’s analysis showed patterns of it receiving LeadCoin tokens from 14 wallets. The source of those LeadCoin tokens, albeit with proxy transfers in between, can be traced back to the original sale contract, as illustrated below:

(Image courtesy of Alethio)

In short, tokens appear to have gone from the official LeadCoin issuance contract, through numerous independent wallets, to a single wallet that also happened to be one of the top-10 holders of SRN and STX, according to Alethio’s analysis.

Sirin Lab’s spokesperson said this wallet from the LeadCoin sale has nothing to do with Singulariteam group nor Hogeg’s secondary consulting firm Alignment Group, adding:

“Chances are it belongs to one of the brokers in this industry. If it has LeadCoin tokens it’s probably because the owner has invested in LeadCoin.”

Alethio’s new suite of investigative tools are not intended to guide interpretation of the data, Sui said. Instead, these tools are merely meant to help people make more informed decisions based on understanding the flow of funds.

Alignment Group

Aside from the above-mentioned lawsuit, it appears that some of Hogeg’s relationships with other companies across the crypto ecosystem may now be strained.

Since joining the blockchain sector in 2013, Hogeg has invested in and worked with many of Israel’s crypto startups. Hogeg is the owner of both the VC fund Singulariteam and the blockchain consulting firm Alignment Group. A press release issued in 2017 indicated that Alignment was being founded as a “blockchain hub” by Hogeg’s Singulariteam, the blockchain firm BlockchainIL and crypto investment group CoinTree Capital, run by Uriel Peled, also the founder of Orbs. The press release also noted that Alignment’s clients included Bancor, and features a photo of Bancor co-founder Eyal Herzog.

The Bancor company logo remains listed on the consulting firm’s portfolio page. However, while Sirin Labs partnered with Bancor in the SRN token sale and Bancor published a Facebook post about SRN, a Bancor spokesperson told CoinDesk that “no Bancor founders have ever worked with Moshe Hogeg as an investor” and they did not have any “agreement with Alignment Group.”

The company logo for Orbs also appears on the Alignment website. An Orbs spokesperson told CoinDesk that although “several Orbs founders initially considered involvement in Alignment,” none of them officially took part. Orbs founder and former CoinTree CEO Peled was also featured as a LeadCoin advisor on that ICO’s website in 2017, a connection Orbs denied as well.

Hogeg told CoinDesk that within a few short weeks after establishing Alignment, both of the other entrepreneurs – Peled and Herzog – left the advisory firm, leaving him as the sole owner. While an Orbs spokesperson denied involvement with any of Hogeg’s crypto projects, CoinDesk was able to confirm with the Orbs team that Hogeg invested in Orbs through Singulariteam.

Avishai Ziv, CEO of both Singulariteam and Alignment, told CoinDesk that his companies invested in both Bancor and Orbs. Ziv explained these investments sometimes took the form of services provided by Alignment, traditional fiat investments through Singulariteam or cryptocurrency sent by Hogeg, depending on the context.

“Singulariteam, as a venture company, is not allowed to participate in any ICO,” Ziv said of current legal restrictions in Israel. “So, maybe sometimes Moshe is doing it on a personal level. Maybe sometimes other partners are also doing it on a personal level. Alignment mainly gets payments in light of service agreements before the ICO.”

Singulariteam CFO Guy Elhanani is also simultaneously the CFO of Sirin Labs.

As for the lawsuit, it claims that Hogeg urged investors to participate in the Stox ICO by claiming the token could be listed on the cryptocurrency exchange Binance. The consulting firm Hogeg owns called Alignment Group lists Binance on its portfolio page.

However, a Binance spokesperson told CoinDesk:

“We have no affiliation with Alignment Group. Our guess is that the firm has included the Binance logo on their website to indicate their personal portfolio of projects, ie. they may be holders of Binance Coin (BNB). We have no affiliation with STOX or Moshe.”

Sirin Labs

Much like both the Stox and LeadCoin tokens, Sirin Labs’ SRN token suffered in the broader market since ether prices dropped.

According to ICO-class-action.org, there are now 52 people interested in filing a new lawsuit against Sirin Labs because that SRN asset and its blockchain ecosystem may not have sufficient value. As of the time of press, it is unclear who the plaintiffs would be or what the details of this alleged case would be, although a representative from the site confirmed that documentation for this prospective case is proceeding.

Speaking of the broader market sentiment that might have influenced how people view his projects, Hogeg told CoinDesk:

“We’ve seen a lot of value that was invested in the [blockchain] industry but there was not a lot of value created for real users.”

As for Sirin Labs, a Ukrainian retailer called Legio LLC confirmed it will soon start selling Sirin phones in the Ukraine. A Sirin Labs spokesperson told CoinDesk more than 10,000 phones have been manufactured so far and the company plans to open a flagship store in Tokyo this April.

Hogeg said such “real products” will take the blockchain technology “to mass markets,” concluding:

“What I see right now is a lot of bullshit is getting out of the industry and the real people who really understand the industry, the philosophy and the potential behind it, they are staying.”

The BitcoinTalk forum lost a third of its referrals from the bitcoin community in February, according to available traffic data from website analytics firm SimilarWeb.

The old message forum was created by Satoshi Nakamoto in 2009. The very first bitcoin transaction was negotiated on the BitcoinTalk forum– 10,000 BTC for some pizza.

But February referrals from several cryptocurrency websites and a couple major platforms (like Twitter and Github) declined markedly for BitcoinTalk in February. Their numbers are down by nearly a third in one month.

Still, dropping another half of whatever the Google search volume for “bitcoin” was in March 2018 over just two months, after spending eight months fizzling down by a quarter, seems to be a significant movement in global curiosity about and interest in Bitcoin.

The volume of news stories with “Bitcoin” in the headline increased sixfold from June 2017 to November 2017, from 630 news stories in a month, to 3,788 news stories- most of them about the incredible price gains bitcoin was making on its meteoric rise.

This publicity likely drove curiosity and interest in the cryptocurrency, reflected in the increase in Google search volume for “Bitcoin.”

When the price of Bitcoin showed no sign of another stellar rise, interest quickly waned.

Most cryptocurrency companies struggle to get a bank account. This is mainly due to inadequate anti-money laundering procedures and the banks’ fear of being fined. At least, that’s what these centralized institutions with coffers stuffed full of dirty money want you to believe. In reality, they’re out of their depth and scrambling to stay relevant.

Banks Suppress Cryptocurrency Because They Fear It

In June 2016, the British public lost its mind. Driven by an ageing population of right-wing voters clinging to the memory of the “Great” Britain of the colonial years–and voter abstention on behalf of the youth.

Then, just a few months later, the U.S. followed suit and voted a misogynistic reality TV star into the White House.

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What follows only goes to show the danger of having elderly, out of touch rulers at the helm of society.

Experience is valuable and I’m not trying to come across as ageist. But, it is a fact that most of us become resistant to new things as we get older. Now we’re overrun by a bunch of white-haired old men at odds with technology because they fear it.

Why Do We Fight Change As We Get Older?

It’s not just the Tory backbenchers and upper-middle-class Britons who are losing their grip on society. Warren Buffett’s been making the headlines a lot lately for his absurd commentary on Bitcoin. It makes me recall the words of one wise lady I knew long passed.

If you don’t know anything about it, it’s best to listen rather than speak.

Why do Buffett and so many others like him fear Bitcoin, cryptocurrencies, and financial innovation?

Because they don’t understand it. Worse than that, they don’t know how to control it–and they certainly don’t need transparency of transactions in their shady deals. They’re already profiting handsomely from market manipulation, money laundering, and cronyism.

As Barry Silbert stated, Buffett investment Wells Fargo has been fined almost 100 times since the turn of the century:

Wells Fargo, a Buffett investment, has been fined 93 times for fraud and other abuses, for a total of $14.8 billion in fines since just 2000

Big Banks–A Tale of Money Laundering and Corruption

Is it ironic that banks don’t want to work with cryptocurrency companies, brandishing them as “unregulated” and even criminal? Bitcoin was born as a response to the same global financial crisis a few centralized and decidedly criminal institutions caused.

That such global turmoil could be spurred by the actions of so few was unforgivable. Yet, we duly forgave, and used our tax paying money to bail out the banks.

Now banks are suppressing innovation because cryptocurrency companies have ‘lax AML procedures’ in place. Really?

Bank scandal after bank scandal last year only goes to prove that large global financial institutions are, in fact, enablers of illicit financial flows.

Whether they operate laundering crime under the thumb of Russian oligarchs in the Baltic states, or they’re simply considered too big to fail, the resounding majority of the world’s banks have opened their arms to dirty money. Some more than others.

Beyond laundering close to $200 billion of suspected dirty money and having its offices raided in November, Bloomberg calculates that the German bank shelled out over $18 billion in the last decade to settle AML disputes.

Isn’t that a shit-ton of money? Apparently not, if Alec Ziupsnys is to be believed. That’s simply a mere fraction of the profits they make from facilitating criminal transactions.

Banks Won’t Work with Cryptocurrency Companies Over AML

They say that people in glass houses shouldn’t throw stones. With most big-name banks winding up in an AML scandal at some point, not wishing to work with cryptocurrency companies for their lax AML procedures no longer holds up in court.

Big bully banks are getting their way because they are scared of becoming irrelevant, just like ageing backbench politicians.

Take John Frigo, for example. He’s currently working as a digital marketing lead for MySupplementStore.com. However, until recently, he was running a currency exchange and niche banknote business and even looking into opening up a Bitcoin or Cryptocurrency exchange in Chicago. He says:

I had the licensing… I was registered with FinCEN and had a Money Transmitter license from the state of Illinois. However, banking was the major issue and hurdle that ultimately made me decide not to pursue it.

This isn’t really surprising and in many ways isn’t unique to cryptocurrency. Banks and merchant processing companies routinely blacklist entire industries which are completely legal.

He goes on to say that he has no doubt that the banks are the biggest money launderers around. And that AML and KYC laws do very little to stop money laundering. They simply present a lot of hurdles and headaches for individuals trying to run businesses. And they halt innovation.

There’s an ongoing joke in the financial services industry, want to launder money open a bank.

If you want to launder money, open a bank. Image from Shutterstock

A Tale of Threats and Bribery

Bruno Skvorc is CEO of Bitfalls.com and Coinvendor.io in Croatia. He’s received his fair share of threats as well as requests for bribes from banks to open an account. He strongly believes that they refuse to work with cryptocurrency companies not due to lax AML, but out of fear of becoming irrelevant. He states:

The banks are arguing for stronger AML because of two reasons:

1. To them it doesn’t matter. Any fine they have to pay if discovered will be less than their profits from the laundering. So to them, it’s very much worth it.

2. Stronger AML is able to kill any young crypto company, i.e. their direct competition. It’s literally a case of being immune to bullets–they can get hit, but take no damage. For us, though, the bullets are lethal.

The AML5 Directive in the EU

Bruno urges us to take the new AML5 directive in the EU under further scrutiny. One of its stipulations is that in order to offer any kind of monetary service–including crypto facilitation–you need to be able to reverse transactions for a given time.

This is technically impossible on the blockchain unless it’s a mockchain (a private blockchain like IBM’s Hyperledger Fabric). So it disqualifies all crypto traders automatically unless they’re willing to degrade their service to the point of having the customers wait for days before their transactions go through. Meanwhile, banks can still compete, pretending they’re faster and more “legal”.

Another interesting aspect of AML5 is that it requires all money-service businesses to carry out extensive KYC of all customers. Banks have a handful of customers a day and entire departments dedicated to this. However, Bruno says:

A crypto trading desk like Coinvendor.io which has hundreds of signups per day is thrown under the bus. There is no way to do the kind of checking and communication with customers that AML5 requires, while at the same time respecting GDPR and handling it all in a timely manner.

Final Thoughts

While we’re in this chicken and egg phase where we have to rely on existing infrastructure, it pays to keep the hope. The banks may have the upper hand for now, but they can’t halt innovation forever. And the smarter ones know this to be the case. But currently Bruno says:

The system is rigged against crypto companies. And that’s exactly why we’re using crypto–to exit this rigged system.

Bitcoin’s price has continued to trade sideways around $3,900 as its volatility continues to decrease. Although this stability may be welcomed by some investors who have been tormented by the seemingly constant bouts of volatility in the crypto markets, the current decrease in volatility is likely temporary.Analysts now expect Bitcoin to continue ranging sideways in the near-term, with a potential drop towards the mid-$2,000 region being a possibility in the future assuming that the cryptocurrency is unable to decisively break above the lower-$4,000 region.Bitcoin Volatility Dives as BTC Price Gets Caught in Tight Trading RangeAt the time of writing, Bitcoin is trading down marginally at its current price of $3,900, around where it has been caught at for the past couple of weeks.Because of this bout of sideways trading, BTC is currently experiencing its lowest rate of volatility since mid-November of 2018.Danny Kim, the head of growth at SFOX, spoke to Forbes about the declining volatility, noting that prior to mid-November of 2018, BTC hasn’t seen volatility this low since May of 2017.“Over the past months, we’ve generally observed tight range-bound trading with very short spikes in both volatility and price to both the upside and downside… While crypto-asset prices remain, as a whole, highly volatile and difficult to predict, the BTC/USD pair’s volatility is currently at its lowest point since mid-November 2018… Before that time, its volatility hadn’t been this low since mid-May 2017,” he explained.It is important to note that Bitcoin made a large downwards move following its extended period of sideways trading in November of 2018, plummeting from roughly $6,400 to lows of $3,200.With regards to the cryptocurrency’s current levels of support, analysts note that although BTC currently has some support at $3,800, its strongest levels of support currently exist at $3,500 and $3,000 respectively.“Bitcoin has been building a minor support at $3,800… However, it’s not a support level that you can really lean on… The real supports are exactly where they’ve been since December at $3,500 and $3,000 respectively,” said Mati Greenspan, the senior market analyst at eToro.Bitcoin May Plunge to Mid-$2,000 Region Before Finding Strong SupportBitcoin’s current stability may be deceptive, as a drop towards the upper-$2,000 region may be inevitable if BTC fails to decisively move to above $4,000.SalsaTekila, a popular cryptocurrency analyst on Twitter, spoke about this possibility in a recent tweet, noting that he sees the mid-to-upper $2,000 range as a great place to start buying.“$BTC view: 1) 4400$-4500$ area is where I intend to hedge if we go up. 2) If break down, keep an eye for absorption below 3330$ (HTF liquidity pool). 3) Green box 2500-2850$ area is where I start buying spot if no absorption and we break-down to new lows.”$BTC view:1) 4400$-4500$ area is where I intend to hedge if we go up.2) If break down, keep an eye for absorption below 3330$ (HTF liquidity pool).3) Green box 2500-2850$ area is where I start buying spot if no absorption and we break-down to new lows. pic.twitter.com/qDt4wZ8qco— SalsaTekila (JUL) (@SalsaTekila) March 12, 2019As the markets begin incurring increased levels of volatility, traders and analysts alike will gain a greater insight into which direction the markets are heading.Featured image from Shutterstock.

Coinbase Pro will have active trading of Stellar Lumens (XLM) by morning. The exchange announced in a blog post earlier today that it is currently accepting deposits. They are conducting the listing in a similar manner to how they did Ripple, in stages. The “deposit only” stage will last until at least 1AM PT. Again, Coinbase Pro users can currently make deposits of XLM. Trading will commence everywhere but New York tomorrow.

Coinbase Pro to List Stellar (XLM) Against Dollar, Bitcoin, and Euro

Three pairs will be listed: Bitcoin, Dollars, and Euros. The current price of XLM is roughly 10 cents. It’s been trading in the range of 9-12 cents for quite some time, as the crypto winter has dragged the price of most assets down.

Coinbase says:

Once sufficient supply of XLM is established on the platform, trading on the XLM/USD, XLM/EUR, and XLM/BTC order books will start in phases, beginning with post-only mode and proceeding to full trading should our metrics for a healthy market be met. Support for XLM will be immediately available in Coinbase’s supported jurisdictions, with the exception of New York State. Additional jurisdictions may be added at a later date.

In order to make deposits at Coinbase, a memo must be used. Coinbase has more information about this in their help pages. Only Stellar and Ripple have the requirement of using a memo to ensure deposits get where they’re going. Coinbase requires them, so we suggest that users make sure they create their transfers properly.

Stellar Still Not Available For Retail Purchase Via Coinbase

Coinbase is apparently unsure if they will add XLM to Coinbase.com, its retail-facing product. Which is to say, if you want to buy Ripple to trade the wave on Coinbase Pro, you’ll have to get them somewhere else. Coinbase also used the opportunity to note that it will be listing even more assets in the coming months. They donn’t mention any specifics, but say:

One of the most common requests we receive from customers is to be able to trade more assets on our platform. Per the terms of our listing process, we anticipate supporting more assets that meet our standards over time.

Just like with Ripple, there are four stages. The first stage, the deposit stage, is the most important, as it’s the period during which Coinbase has to ensure that sufficient demand for XLM trading exists. The other stages last for a period of minutes and limit the types of orders that can be done, until finally full trading is enabled. The process was used with Ripple, as described in this article.

Cosmos, a highly anticipated blockchain itself designed to improve the interoperability between any number of other blockchains, has officially released a live software.

With the mining of its first block at 23:00 UTC, the project has launched Cosmos Hub, the first in a series of proof-of-stake (PoS) blockchains intended to make up the Cosmos ecosystem.

At present, users of the network will not be able to swap tokens between blockchains or otherwise connect to Cosmos Hub with existing blockchain networks until validators officially vote to activate what is called the Inter-Blockchain Communication (IBC) protocol.

The first phase of today’s Cosmos network launch comes after nearly three years of planning and development. Having debuted the concept for the blockchain interoperability platform back in summer 2016, Cosmos later raised over $16 million in an initial coin offering (ICO) in 2017.

Since then, Tendermint Inc. – a for-profit entity behind the core technology of the Cosmos network – has been releasing preliminary developer-focused products.

Speaking to CoinDesk, Tendermint Inc director Zaki Manian explained:

“We want to take the blockchain development cycle from idea to implementation down from years to months. This is how we’re trying to transform the blockchain space.”

As such, Manian said that the Cosmos Software Development Kit (SDK), which debuted back in February 2018, is already being used by high-profile crypto companies such as the Binance exchange.

In addition, Tendermint Core – the blockchain networking and consensus mechanism underlying the Cosmos Hub – is another key tool that Manian envisions will help “fundamentally remove barriers to innovation” in the blockchain space and ultimately help “compose an entirely new system of finance.”

“Out of all these building blocks, [you’ll be able to compose] an entire … open system of finance that operates to scale and can be composed of individual, specialized chains that do different things,” Manian said.

Unleashing validators

Today’s launch was a significant step toward that broader, expansive vision – one that Manian points out will “take years to fully manifest.” The main purpose of Cosmos Hub launch is to establish the broader ecosystem of validators, entities that stake tokens on the network, while Manian’s team continues to work toward cross-blockchain capabilities.

Cosmos hubs via YouTube.

“In order to make this whole vision of connecting blockchains work, there needs to be a set of operators who have skin in the game to coordinate this blockchain network,” said Manian.

Normally, in a proof-of-work (PoW) system similar to bitcoin or ethereum, these validators are miners who compete for block rewards by operating computer servers and expending large amounts of electricity.

Validators in a PoS system, on the other hand, are “selected” by the system based on a separate metric of staked tokens in order to participate in block creation and transaction finalization.

“In proof-of-stake, the costs and rewards [of the system] are internal,” said Manian. “So, we had to come up with a very sophisticated system of distributing rewards, of distributing the speculator taxation system, of punishing people for malicious behavior, of punishing people for going offline.”

He added:

“All of it has to be internal to the system and that’s why proof-of-stake is such a significant engineering feat over proof-of-work.”

And while Cosmos participants successfully tested this system of validation with roughly 200 computer servers called nodes in a former dummy environment called Game of Stakes, there had never been real value at stake by participants before today.

“[Today’s launch] is about unleashing those live economic incentives and having value at risk for the first time and then letting this set of economic incentives that we’ve designed select who the [validators] are,” said Manian.

According to Manian, this is a crucial foundational step that Cosmos developers are cautious about getting right.

He told CoinDesk: “Building interoperability. Establishing mechanisms for workers of some kind to custody bitcoin or ether or ERC-20 assets and manifest synthetic versions of them in [the Cosmos] environment. If you don’t know who your validators are none of this is possible.”

Next steps

For now, Cosmos users are not allowed to transfer their holdings of the native network currency – ATOM tokens – just yet.

Since ATOM tokens are intended to act as “the collateral that people put at risk to be [validators] in the system” according to Manian, these tokens will be strictly used as the “mechanism for selecting membership into the system.”

Zaki Manian via Tendermint

But once both the system and the validator set are deemed to be in stable condition, token holders will vote on when to enable live ATOM transfers.

Thereafter, a secondary vote will be held to connect new blockchains also called “zones” to the Cosmos Hub and begin swapping heterogeneous cryptocurrencies and non-fungible tokens (NFTs).

“In these early days, we can expect to have issues, updates, and bugs,” the InterChain Foundation – a non-profit organization dedicated to support Cosmos network development – warned in a blog post, adding:

“The existing tools require advanced technical skills and involve risks which are outside of the control of the Interchain Foundation and/or the Tendermint team. … Please exercise extreme caution!”

Staking as a service

Manian told CoinDesk there are 70 validators at Cosmos Hub launch committed to securing the network. Some of these validators are focused on staking tokens as a service to wider ATOM holders.

In a sense, this is almost like leasing out crypto assets in order to earn returns and may encourage new users to flock to the Cosmos ecosystem.

Shayne Coplan, founder of the Union Marketplace for such service providers scheduled to launch in April, told CoinDesk that over the next few months a “cross-network layer of reputation” for these validators will emerge.

“If you look at these different staking service providers, a lot of them are performing on several networks at any given time,” Coplan said, referring to other staking networks such as Tezos and the Tendermint-based network Loom. “Now with Cosmos being another very valuable chain with staking and delegation, it’s going to place a major emphasis on cross-network reputation for validators.”

The rewards these stakers and holders gain are generally earned in the ATOM token but in future may also be earned in wrapped forms of alternative cryptocurrencies such as bitcoin and ether.

While Union Marketplace has quietly collected around 230 validators across all its various staking networks as it gears up for launch, Coplan expects the Cosmos launch, in particular, will inspire more players to experiment with these types of services.

“There’s a huge range of people interested in these types of staking services, from retail investors to investment funds,” Hendrik Hofstadt, co-founder of the validator startup Certus One, told CoinDesk. “Quite a few larger funds have reached out to us.”

Plus, Certus One’s Telegram group for retail ATOM users signed on 60 members within the first 24 hours of opening, Hofstadt added.

Meanwhile, Joe Pindar, co-founder of the validator startup Block3, told CoinDesk this type of ecosystem opens up a new type of investment opportunity.

Speaking to how Cosmos rewards stakers on a continual basis, which he compared to income investing, Pindar added:

“You actually start getting revenue or income from those rewards and start to appreciate more and more ATOMs, which I think is a different investing model and I’m excited to see how that plays out.”